Bank of China Ltd. is lending more than $250 million to refinance an office tower near Columbus Circle in Manhattan, according to people familiar with the matter, in the latest sign that cash-rich Chinese investors are funneling money into prime New York property.
The five-year loan on the newly remodeled office building, called 3 Columbus Circle, is a boost for a partnership between SL Green Realty Corp. and developer Joseph Moinian that owns the 26-story building. They made headlines recently when SL Green, New York's largest office building owner, rode in to save Mr. Moinian from losing 3 Columbus to another landlord, Related Co.'s Stephen Ross.
The refinancing also is another big commercial real-estate loan made by Bank of China's New York branch, which has been aggressively pushing into New York and other U.S. markets in recent months. The loans underscore a broader overseas push by Chinese banks, which are being encouraged by Beijing to expand abroad to help diversify the country's enormous foreign-exchange reserves.
Bank of China underwrote the new loan on 3 Columbus Circle based on an estimated value of more than $500 million of the 700,000-square-foot property, the people with knowledge of the deal said. There is some risk associated with the 3 Columbus deal because the property is less than 30%-leased. But the loan is expected to include certain reserves and guarantees put up by the SL Green-led joint venture to make up for this, the people said.
The five-year loan will replace the $250 million 'bridge,' or short-term, mortgage held by Deutsche Bank AG and SL Green that is coming due, the people said.
Raymond Qiao, first vice president at Bank of China's New York branch, declined to comment, as did a spokesman for Mr. Moinian.
The loan represents the latest chapter in the saga 3 Columbus Circle, formerly 1775 Broadway. Mr. Moinian, an Iranian immigrant who was very active in the boom years, spent about $100 million to upgrade it, including a new glass skin for the building.
Last summer, Mr. Ross, made a grab for the building by purchasing the $250 million debt on the property. Mr. Ross's plan was to foreclose on and demolish the office project and redevelop the property with luxury condominiums and Nordstrom as its anchor tenant.
But Mr. Moinian blocked that in January by buying the mortgage back with help from another major New York City owner, SL Green.
With job growth stronger in Manhattan than in other parts of the country, the vacancy rate in Midtown dropped to 8% in the first quarter of 2011 its lowest level since the fourth quarter of 2008, according to Cushman & Wakefield.
Foreign investors have long coveted New York property, some with more success than others. Japanese investors, for example, stumbled badly in the 1990s with their purchase of Rockefeller Center and their development of Americas Tower on Sixth Avenue.
Chinese banks so far appear to be relatively conservative in their approach to real-estate investment. Lenders have tried to limit their risks by financing buildings with stable existing cash flows and lending to developers and investors with a solid track record. They generally are offering to lend no more than 65% of a property's value. During the property frenzy, U.S. banks had lent more than 80% of a building's value.
Late last year, Bank of China made an $800 million loan to Brookfield Office Properties to refinance the office building at 245 Park Ave., near Grand Central Terminal. That loan was the biggest on a single building provided by a single lender during the economic downturn.
In June, Industrial & Commercial Bank of China, that country's largest bank by assets, closed its first commercial-property loan in the U.S. by lending $150 million to help refinance a 27-story office-and-retail tower in midtown Manhattan, called 650 Madison Avenue. The ICBC financing was part of a $355 million loan led by Wells Fargo & Co. to a partnership led by private-equity firm Carlyle Group.
Bank of China and ICBC, which are both 70%-owned by the Chinese government, have been betting that property values in the U.S. have fallen enough that their lending risks will be limited. They are particularly fond of the New York market because of the relatively healthy demand for office space in times both good and bad.
Monday, April 11, 2011
Sunday, April 10, 2011
Ullens Collection Sets a Chinese Art Auction Record
A triptych by living Chinese artist Zhang Xiaogang sold for 79 million Hong Kong dollars (US$10 million) on Sunday in Hong Kong, setting a new world record for contemporary Chinese art sold at auction.
The work, 'Forever Lasting Love,' sold for more than double its high estimate. It was one of several other record-breaking sales in the highly anticipated auction of a large, unrivaled collection of early Chinese contemporary art owned by Belgian Guy Ullens. Despite some early intrigue surrounding the sale, the Ullens collection fetched HK$427 million รข ' more than four times its presale estimate.
Mr. Ullens was one of the first to collect Chinese contemporary art. He began building his private collection in the 1980s, and his collection includes early pivotal works from the art movement's biggest names.
Sotheby's, the house behind the auction, sold all 106 lots that made up about 10% of Mr. Ullens's Chinese art holdings. Evelyn Lin, Sotheby's head of contemporary Asian art, calls the collection a 'visualization of the Chinese nation's history' and says that it is museum-worthy in its quality and breadth.
In a packed room on Sunday, bidding battles between buyers in the room and on the phones upped the prices for artworks from blue-chip Chinese artists such as Zhang Peili and Wang Guangyi.
But works by Zhang Xiaogang were the stars of the sale.
The work, 'Forever Lasting Love,' sold for more than double its high estimate. It was one of several other record-breaking sales in the highly anticipated auction of a large, unrivaled collection of early Chinese contemporary art owned by Belgian Guy Ullens. Despite some early intrigue surrounding the sale, the Ullens collection fetched HK$427 million รข ' more than four times its presale estimate.
Mr. Ullens was one of the first to collect Chinese contemporary art. He began building his private collection in the 1980s, and his collection includes early pivotal works from the art movement's biggest names.
Sotheby's, the house behind the auction, sold all 106 lots that made up about 10% of Mr. Ullens's Chinese art holdings. Evelyn Lin, Sotheby's head of contemporary Asian art, calls the collection a 'visualization of the Chinese nation's history' and says that it is museum-worthy in its quality and breadth.
In a packed room on Sunday, bidding battles between buyers in the room and on the phones upped the prices for artworks from blue-chip Chinese artists such as Zhang Peili and Wang Guangyi.
But works by Zhang Xiaogang were the stars of the sale.
Wednesday, April 6, 2011
Japan is "strong dog", the tsunami was rescued after drifting for 3 weeks
It appears almost too good to be true, but this little dog has been found alive and well adrift at sea, an astonishing three weeks after the tsunami that devastated Japan.
Members of the Japan Coast Guard came across the dog on Friday as they were conducting an aerial search of the area.
Against all the odds, the dog appears to have survived by living in a partially submerged house that had been swept out to sea.
Rescuers had hoped to find more tsunami survivors living inside the house but after tearing the roof open, it was found to be empty apart from the dog.
Despite its three weeks at sea, the medium-sized brown dog seemed to be in reasonably good condition considering its ordeal.
The discovery of the dog is a rare glimmer of hope in Japan where thousands of people are believed to have perished in the disaster.
Members of the Japan Coast Guard came across the dog on Friday as they were conducting an aerial search of the area.
Against all the odds, the dog appears to have survived by living in a partially submerged house that had been swept out to sea.
Rescuers had hoped to find more tsunami survivors living inside the house but after tearing the roof open, it was found to be empty apart from the dog.
Despite its three weeks at sea, the medium-sized brown dog seemed to be in reasonably good condition considering its ordeal.
The discovery of the dog is a rare glimmer of hope in Japan where thousands of people are believed to have perished in the disaster.
Thursday, November 25, 2010
It turns out, giving thanks is good for your health
A growing body of research suggests that maintaining an attitude of gratitude can improve psychological, emotional and physical well-being.
Adults who frequently feel grateful have more energy, more optimism, more social connections and more happiness than those who do not, according to studies conducted over the past decade. They're also less likely to be depressed, envious, greedy or alcoholics. They earn more money, sleep more soundly, exercise more regularly and have greater resistance to viral infections.
Now, researchers are finding that gratitude brings similar benefits in children and adolescents. Kids who feel and act grateful tend to be less materialistic, get better grades, set higher goals, complain of fewer headaches and stomach aches and feel more satisfied with their friends, families and schools than those who don't, studies show.
'A lot of these findings are things we learned in kindergarten or our grandmothers told us, but we now have scientific evidence to prove them,' says Jeffrey J. Froh, an assistant professor of psychology at Hofstra University in Hempstead, N.Y., who has conducted much of the research with children.
'The key is not to leave it on the Thanksgiving table,' says Robert Emmons, a professor of psychology at the University of California-Davis and a pioneer in gratitude research. And, he notes, 'with the realization that one has benefited comes the awareness of the need to reciprocate.'
It's possible, of course, to over-do expressions of gratitude, particularly if you try to show it with a gift. 'Thanking someone in such a way that is disproportionate to the relationship -- say, a student giving her teacher an iPod -- will create resentment, guilt, anger and a sense of obligation,' says Dr. Froh.
Gratitude can also be misused to exert control over the receiver and enforce loyalty. Dr. Froh says you can avoid this by being empathic toward the person you are thanking -- and by honestly assessing your motivations.
In an upcoming paper in the Journal of Happiness Studies, Dr. Froh and colleagues surveyed 1,035 high-school students and found that the most grateful had more friends and higher GPAs, while the most materialistic had lower grades, higher levels of envy and less satisfaction with life. 'One of the best cures for materialism is to make somebody grateful for what they have,' says Dr. Froh.
Adults who frequently feel grateful have more energy, more optimism, more social connections and more happiness than those who do not, according to studies conducted over the past decade. They're also less likely to be depressed, envious, greedy or alcoholics. They earn more money, sleep more soundly, exercise more regularly and have greater resistance to viral infections.
Now, researchers are finding that gratitude brings similar benefits in children and adolescents. Kids who feel and act grateful tend to be less materialistic, get better grades, set higher goals, complain of fewer headaches and stomach aches and feel more satisfied with their friends, families and schools than those who don't, studies show.
'A lot of these findings are things we learned in kindergarten or our grandmothers told us, but we now have scientific evidence to prove them,' says Jeffrey J. Froh, an assistant professor of psychology at Hofstra University in Hempstead, N.Y., who has conducted much of the research with children.
'The key is not to leave it on the Thanksgiving table,' says Robert Emmons, a professor of psychology at the University of California-Davis and a pioneer in gratitude research. And, he notes, 'with the realization that one has benefited comes the awareness of the need to reciprocate.'
It's possible, of course, to over-do expressions of gratitude, particularly if you try to show it with a gift. 'Thanking someone in such a way that is disproportionate to the relationship -- say, a student giving her teacher an iPod -- will create resentment, guilt, anger and a sense of obligation,' says Dr. Froh.
Gratitude can also be misused to exert control over the receiver and enforce loyalty. Dr. Froh says you can avoid this by being empathic toward the person you are thanking -- and by honestly assessing your motivations.
In an upcoming paper in the Journal of Happiness Studies, Dr. Froh and colleagues surveyed 1,035 high-school students and found that the most grateful had more friends and higher GPAs, while the most materialistic had lower grades, higher levels of envy and less satisfaction with life. 'One of the best cures for materialism is to make somebody grateful for what they have,' says Dr. Froh.
Tuesday, November 23, 2010
As the rise of Apple Inc.'s iPad and other tablets threatens its low-cost laptop business
The world's second-biggest PC maker by shipments said Tuesday it will release in February a tablet running Microsoft Corp.'s Windows software with a 10.1 inch screen.
Acer will also release two tablets using Google Inc.'s Android software in April, one with a 7-inch screen and one with a 10.1-inch screen.
In addition, executives at the Taiwan company unveiled a portable computer with two touchscreens dubbed the Iconia Touchbook. The laptop opens to reveal a second touchscreen in place of a keyboard. The product will be launched in the U.S. and some European countries in December and will retail for $1,499.
Acer, which had unveiled plans for tablet-style machines in May, is the latest company to jump into the increasingly crowded tablet market after Apple's iPad, released in April, attracted strong consumer demand. Samsung Electronics Co., BlackBerry maker Research In Motion Ltd. and Hewlett-Packard Co., have also announced plans to introduce tablets.
Jim Wong, an Acer senior corporate vice president, said he expects 40 million to 50 million world-wide tablet unit sales next year, with hopes Acer will gain 10% market share.
For two years, Acer has relied on netbooks -- tiny, low-priced laptops -- to propel growth. The company's products, especially its Aspire One, proved so popular, Acer vaulted over Dell Inc. to become the No. 2 PC maker behind Hewlett-Packard.
But worries have emerged that the popularity of the iPad and other tablets could eat into netbook sales. After tripling to $14.3 billion in 2009, netbook sales are expected to slip nearly 2% this year, according to research firm IDC. In 2011, the market is expected to shrink further.
Acer didn't provide details about pricing for its tablets during its product event in New York. But in an interview after the event Jenda Chen, director of product management at Acer America, said the 7-inch Android tablet will likely sell for $399 to $499, while the larger Android model will most likely be priced between $399 and $649.
Acer will also release two tablets using Google Inc.'s Android software in April, one with a 7-inch screen and one with a 10.1-inch screen.
In addition, executives at the Taiwan company unveiled a portable computer with two touchscreens dubbed the Iconia Touchbook. The laptop opens to reveal a second touchscreen in place of a keyboard. The product will be launched in the U.S. and some European countries in December and will retail for $1,499.
Acer, which had unveiled plans for tablet-style machines in May, is the latest company to jump into the increasingly crowded tablet market after Apple's iPad, released in April, attracted strong consumer demand. Samsung Electronics Co., BlackBerry maker Research In Motion Ltd. and Hewlett-Packard Co., have also announced plans to introduce tablets.
Jim Wong, an Acer senior corporate vice president, said he expects 40 million to 50 million world-wide tablet unit sales next year, with hopes Acer will gain 10% market share.
For two years, Acer has relied on netbooks -- tiny, low-priced laptops -- to propel growth. The company's products, especially its Aspire One, proved so popular, Acer vaulted over Dell Inc. to become the No. 2 PC maker behind Hewlett-Packard.
But worries have emerged that the popularity of the iPad and other tablets could eat into netbook sales. After tripling to $14.3 billion in 2009, netbook sales are expected to slip nearly 2% this year, according to research firm IDC. In 2011, the market is expected to shrink further.
Acer didn't provide details about pricing for its tablets during its product event in New York. But in an interview after the event Jenda Chen, director of product management at Acer America, said the 7-inch Android tablet will likely sell for $399 to $499, while the larger Android model will most likely be priced between $399 and $649.
The Nevada Supreme Court threw out a lower court's decision to award $58.6 million to a Hong Kong businessman for allegedly
In 2008, a jury decided Richard Suen should be paid for helping arrange meetings in Beijing between company executives and Chinese officials, which he said led to the gambling company's 2002 receipt of a coveted license to operate casinos in Macau. The Chinese territory, on track this year to rake in four times the gambling revenue of the Las Vegas Strip, is now home to three casinos run by Las Vegas Sands unit Sands China Ltd.
Las Vegas Sands spokesman Ron Reese said, 'The company hasn't yet had an opportunity to thoroughly review the details, but obviously we're pleased with the result.'
Mr. Suen couldn't immediately be reached for comment.
Las Vegas Sands paid $42.5 million in June 2009 to settle a dispute with three other businessmen who had claimed they helped the company secure its Macau license.
Las Vegas Sands spokesman Ron Reese said, 'The company hasn't yet had an opportunity to thoroughly review the details, but obviously we're pleased with the result.'
Mr. Suen couldn't immediately be reached for comment.
Las Vegas Sands paid $42.5 million in June 2009 to settle a dispute with three other businessmen who had claimed they helped the company secure its Macau license.
Monday, November 22, 2010
Really fascinating to see the tug-of-war between the policy makers in China and the U.S. gather steam this morning
For those who haven’t been paying attention, the Fed is flooring the gas pedal to try to get the U.S. economy moving, by essentially creating money electronically and using it to buy U.S. Treasurys. (That’s the QE policy everybody has been talking about.)
Meanwhile, on the other side of the world the Chinese are trying to dam up the flood of liquidity that’s been pouring into their economy ─ in part because of the Fed’s easy money policy. That wave of cash is putting upward pressure on prices there.
But isn’t this a global economy? How can the top economy wonks in the two largest economies in the world have such a fundamentally different view where policy needs to go? In a word: Food.
The Fed’s QE policies are weakening the dollar. And the weak dollar has been driving food commodity prices higher. But that means very different things in the U.S. and China. Morgan Stanley economist Richard Berner churned out a good piece running down whether food inflation would be a serious hit to consumers in the U.S. and emerging markets. He writes:
Yes, but to a limited extent, reflecting the relatively small share of food (and energy) in [U.S.] consumer budgets. Admittedly, a jump to, say, 6% food inflation would take a significant bite out of consumer budgets: It would add 0.4-0.5% to the inflation rate and take a similar amount from real spendable income, at a time when such income is growing by only about 2%.
It’s worth noting that in emerging markets, the story is different: The weight of food and energy in consumer budgets and price indexes is at least twice as large as in the U.S. and other developed economies, so the impact on budgets is more substantial. Likewise, the influence on inflation expectations in EM economies is more pronounced. In the context of their strong growth, smaller margins of economic slack, and still accommodative monetary policy, the upside inflation risks in those economies are genuine.
Now you might ask, why is fending off inflation such a priority for China. Back in January, the Journal’s James Areddy explained that sensitivity to inflation runs deep in China ─ a reminder of how poor the country remains, with the price of pork, for instance, remaining a major consideration in household finances.
Meanwhile, on the other side of the world the Chinese are trying to dam up the flood of liquidity that’s been pouring into their economy ─ in part because of the Fed’s easy money policy. That wave of cash is putting upward pressure on prices there.
But isn’t this a global economy? How can the top economy wonks in the two largest economies in the world have such a fundamentally different view where policy needs to go? In a word: Food.
The Fed’s QE policies are weakening the dollar. And the weak dollar has been driving food commodity prices higher. But that means very different things in the U.S. and China. Morgan Stanley economist Richard Berner churned out a good piece running down whether food inflation would be a serious hit to consumers in the U.S. and emerging markets. He writes:
Yes, but to a limited extent, reflecting the relatively small share of food (and energy) in [U.S.] consumer budgets. Admittedly, a jump to, say, 6% food inflation would take a significant bite out of consumer budgets: It would add 0.4-0.5% to the inflation rate and take a similar amount from real spendable income, at a time when such income is growing by only about 2%.
It’s worth noting that in emerging markets, the story is different: The weight of food and energy in consumer budgets and price indexes is at least twice as large as in the U.S. and other developed economies, so the impact on budgets is more substantial. Likewise, the influence on inflation expectations in EM economies is more pronounced. In the context of their strong growth, smaller margins of economic slack, and still accommodative monetary policy, the upside inflation risks in those economies are genuine.
Now you might ask, why is fending off inflation such a priority for China. Back in January, the Journal’s James Areddy explained that sensitivity to inflation runs deep in China ─ a reminder of how poor the country remains, with the price of pork, for instance, remaining a major consideration in household finances.
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